Brand Value of Ad Networks on the Rise

I'm writing this from the iMedia Agency Summit in Scottsdale, having just participated in the Media Director's Summit and caught up with many of my agency colleagues. One of the things I most enjoy about the summits, putting aside the social aspect of seeing my agency buds all together in one place, is that I get to ping my colleagues about some of the issues and phenomena I'm experiencing at Underscore, to see if they're unique to our agency or they're being experienced industry-wide.

It's not just for DR anymoreOne issue I wanted to look into is how agencies are using ad networks. An informal temperature check of my colleagues revealed that agencies are increasingly looking to ad networks to help with branding campaigns, as a way of extending reach and lifting awareness metrics. Indeed, we've been doing more of that lately, and it seems that other agencies are, too.

Part of the appeal that ad networks hold on the branding side of the equation is the notion of being able to reach people in a variety of venues. While the big three portals have long reaped the benefits of branding dollars, there seems to be a realization among agencies that extending reach involves avoiding what former agency-side guru Adam Gerber and others have called "media potholes"-- that is, the pockets of folks who can't be reached because they spend time on sites other than the big three.

There's a convincing reach argument for the use of ad networks. If you work at an agency that relies heavily on traditional metrics like reach and frequency, it often makes sense to look to ad networks for cost-efficient tonnage.

Moving toward brandingOne of the indicators of the general health of the industry that I like to look to is media clearance, by which I mean the percentage of media booked that actually runs without being pre-empted. When DR campaigns that are bought on a performance basis (CPC, CPA) have trouble with clearance, it's often a sign that brand-oriented advertisers -- who tend to purchase media on a CPM basis -- are becoming more active and pre-empting the DR advertisers.

Branding campaigns bought on a CPM basis usually result in more ad dollars for the network, so DR advertisers tend to be pre-empted in such cases. In speaking with colleagues informally, just about the only media folks who wouldn't admit to having clearance issues on DR campaigns were representatives from agencies that specialize in DR. (And isn't that what we'd expect them to say?)

Yes, I realize that one can't draw a perfect parallel between clearance and proliferation of branding campaigns, but it's a fairly good rule of thumb -- one that hasn't let me down yet -- so I'm sticking with it. The more I pry, the more I hear about having to back CPC and CPA models out to a CPM, which is one method DR advertisers typically employ to avoid pre-emption by ad serving systems that prioritize CPM buys (where there's less risk for the publisher) over performance-based buys.

Getting the most (unduplicated) reachAs I mentioned earlier, agencies are relying more on ad networks to help in branding campaigns by delivering qualified reach cheaply. Getting the most from these buys, therefore, entails structuring them to extend reach at an advertiser's effective frequency.

Few ad networks, other than vertical networks that cater to a particular lifestyle or product category, have exclusive arrangements with a given website. Publishers will often let several different networks sell into their sites so as to maximize their potential exposure to profitable buys.

What this means for the advertisers is that using multiple ad networks on a branding buy can result in more audience duplication than one might think.

There are a couple ways to minimize thisThe first involves asking networks to disclose affiliates. Many networks will allow advertisers visibility into their affiliates and let the advertiser eliminate a certain percentage of the affiliates, for whatever reason.

Most of the time, advertisers use this option to eliminate any content of questionable value from their campaigns, but this can also be used to avoid unnecessary duplication. So if two networks both count XYZ.com as an affiliate, an advertiser should consider eliminating it from the list of possible affiliates on one of them.

Another way to minimize duplication is to look at cookie data from past buys. New tools are emerging to look at past campaign data for the purposes of figuring out which networks duplicated the most and for scenario planning with unduplicated reach in mind. Look to your ad server of choice for help with this one.

Tom Hespos is President of New York agency Underscore Marketing. He is a frequent contributor to industry trade publications and has been writing a regular column about online marketing and advertising since March of 1998. His clients include Wyeth...